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Helping brokers become the best defence against fraud

At a glance

  • Zurich has launched a number of initiatives, including the Broker Policy Validation tool, to combat fraud
  • Insurer continues to assist brokers in fight against fraud
  • Clampdown on fraud could translate into enhanced commissions for brokers as well as better rates for customers

Working with brokers has been a key part of Zurich’s strategy for combating fraud in 2013, yielding results for both parties.

Zurich Insider spoke to Alanda Reynolds, Head of Underwriting Fraud at Zurich, about how feedback from brokers helped shape Zurich’s Broker Policy Validation capability, which aims to ensure that all customers get a fair price and are able to tackle attempted fraud at the outset. She also discusses efforts by both brokers and insurers that are leading to real reductions in fraudulent claims, and what Zurich has in store for 2014.

Q: Fraud is an on-going problem for the insurance industry. How is Zurich tackling it?

A: Zurich takes a tough line on fraud across all lines of business and at every stage of the customer journey, from inception to claim. One of our big launches of 2013 was the Broker Policy Validation proposition.

When it went live in July, this capability gave both brokers and Zurich the confidence that the risk being presented was authentic. The system seamlessly checks the policy against a variety of data sources and helps to validate claims details and that the person is who they say they are. Any mismatches are then referred to the broker and we ask them to assist us in our enquiry.

In the vast majority of cases, there is an innocent reason for the mismatch, such as a typo in the date of birth or a customer forgetting a very minor claim a few years ago, but sometimes there can be deliberate misrepresentation or worse, organised fraud at play. By working with brokers, this process ensures that we can deal with any questions we may have upfront and act quickly when needed.

For more information on BrokerBox, Zurich’s toolbox for personal lines brokers containing the latest Zurich insight and industry news, click here.

Q: And how does the Broker Policy Validation system benefit brokers?

A: At Zurich we have had extensive expertise in dealing with fraud, so it was a natural step to share this insight with our brokers. In protecting our business against fraudsters, we learned that up-to-date information and knowing your customer is a crucial factor in getting them the best possible quote.

As pricing becomes increasingly sophisticated, every question counts, for example, our checks have highlighted a high proportion of fails linked to a generic date of birth, such as 01/01/1979. Date of birth is crucial in the pricing process and so we are working with brokers to shine a light on this.

It is the same for claims records. Rather than just decline the risk, Zurich believes that it is important to seek out the correct details – it’s what our brokers expect. Ultimately, we believe the Broker Policy Validation system will protect broker businesses from the effects of fraud and protect our honest customers as well.

Q: What else has Zurich done in this space in 2013?

A: As well as the Broker Policy Validation capability, we’ve continued to deliver on our promise to share expertise where it matters through a number of different initiatives. We shared our expertise through a fraud-based leaflet in BrokerBox on how to best protect honest customers and conducted a programme of Breakfast Bite seminars with over 80 brokers attending five sessions across the UK.

This brought together the expertise of claims and underwriters from both a customer and broker perspective with 100% agreeing the content was relevant to their business and that the expertise was ‘good’ or ‘excellent’.

On top of that, we’ve produced numerous articles on fraud in the Personal Lines space. All of this culminated in us winning the Post’s ‘Combating Fraud – Underwriting Initiative of the Year’ at the Insurance Fraud Awards 2013, which recognised our approach of differentiating between customers knowingly misrepresented and those who have been accidentally misrepresented.

Most recently, we’ve launched a leaflet for BrokerBox, sharing expertise on how to avoid unnecessary validation by ensuring data entry is as accurate as possible, based on what the customer has told them. We expect this will help brokers to manage the levels of validation that they see to just cases that really do need a second look.

Q: How important are brokers in the fight against fraud?

A: The relationship we have with our brokers is absolutely crucial to winning the fight against fraud. At the end of the day, nobody knows a customer better than a broker. And we want to support brokers’ expertise, enhance their own-targeted checks and make the process easier for all parties.

We’re always looking for places to engage with brokers, as we hope the feedback will shape our capability in the future and highlight the breadth of the proposition that we offer to brokers. We’re planning on having more expert sessions with brokers because, at the end of the day, they’re our gatekeepers.

The relationship we have with brokers is key to winning the fight against fraud. That’s why I love working with brokers because they see the threat and they respond to it.

Alanda Reynolds, Head of Underwriting Fraud at Zurich

Fraud is fluid, it goes to wherever the opportunity is and so we can never sit back and say ‘job done’. That’s why I love working with brokers, because they see the threat and share our passion for protecting genuine customers.

Q: Looking ahead to 2014, what does Zurich have in store?

A: It’s inevitable that fraud will evolve, especially as the serious fraudsters treat it like a business. This year, there was a lot of publicity around ghost brokers, schemes like ‘crash for crash’ and most recently ‘flash-for-cash’, but as fraudsters become more aware of initiatives that insurers are taking, they’ll always come up with new ways to profit from honest customers. We just have to stay on our toes.

For me, intelligent use of good quality data is where we can gain the advantage. Looking ahead to 2014, there are some industry-wide initiatives that we can look to use. For example, we’re looking forward to being able to gain access to DVLA (Driver and Vehicle Licensing Agency) data, which will enable us to be able to swiftly and efficiently check customers’ driving licences and motoring convictions. This will again reduce instances of fraud and will be incorporated into the other checks we do and ensure that our checks are the most complete.

We’re also taking part, and will be early adopters, of a No Claims Discount (NCD) database, which provides an electronic means of checking NCD entitlement rather than requesting paper copies. This will take time to fully mature, but it is another example of a step in the right direction.

Zurich will also stay close to other industry developments around the Insurance Fraud Register and look to broaden the scope of our protection into other lines and segments.

2014 will be just as busy as 2013 and, of course, we will keep our brokers updated on any news we have.

 

Image © Getty

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